The following settings (the defaults) are recommended.
Maximum Image Height: 640
Maximum Image Width: 1280
Maximum Thumbnail Height: 320
Maximum Thumbnail Width: 640
Maintain Aspect Ratio: Normal CB Default (global default is Yes)
Allow Client Resize: Enabled
It should cause the images width to scale down then allow them to reposition the image as needed within the height limit of 200px (size of that canvas display). It's never going to really work well for large portrait images though as it's just not designed for portrait view as it's a landscape view.
It also shouldn't cause black bars. Are you sure those aren't a part of the image. The below is what a large portrait image will look like (zoomed in).